October 30, 2017 / 10:15 PM / a year ago

EMERGING MARKETS-Chile stocks at six-month high on earnings

    By Bruno Federowski and Anthony Esposito
    SAO PAULO/MEXICO CITY, Oct 30 (Reuters) - Chilean stocks
climbed to a six-month high on Monday, boosted by local
earnings, in contrast to most Latin American markets which
dropped as traders avoided making risky bets ahead of the
nomination of the next U.S. Federal Reserve chair later this
    The Santiago stock exchange's blue-chip IPSA index,
which was closed on Friday for trading due to a local holiday,
rose 1.67 percent above 5,600 points for the first time as
strong quarterly earnings by bank Santander Chile
lifted the financial sector.
    Additionally, a poll last week showed center-right
front-runner Sebastian Pinera, a business-friendly former
president, with stronger-than-anticipated lead over leftist
candidates for the Nov. 19 presidential election.
    Across most of Latin America, shares and currencies were
down as traders awaited the nomination of the next Fed chair,
which should provide further guidance on the pace of U.S.
interest rate hikes in coming months.
    Higher U.S. rates could dampen demand for high-yielding
assets, reducing the value of emerging market currencies.
    In Brazil, the real weakened as investors fretted over
President Michel Temer's ability to pass belt-tightening
    Concerns over his platform of structural reforms, seen as
key to curb growth of public debt and boost long-term economic
growth, had driven the biggest weekly decline in the Brazilian
currency since mid-May. 
    Lawmakers cleared Temer of corruption charges last week, but
a smaller show of support than a similar vote earlier this year
cast doubt over his plans to streamline the social security
    The Brazilian real slipped 0.23 percent. 
    For its part, the Mexican peso slipped 0.64
percent, on ongoing concerns about the renegotiation of the
North American Free Trade Agreement (NAFTA), which underpins
$1.3 trillion in annual trade between Canada, the United States
and Mexico.
    Fitch Ratings said on Monday that if the United States
withdrew from NAFTA, as President Donald Trump has repeatedly
threatened, Mexico's economy would face significant uncertainty,
likely leading to an immediate confidence shock and short-term
market volatility.   
    Key Latin American stock indexes and currencies at 20:43
 Stock indexes                               daily %       YTD %
                              Latest          change      change
 MSCI Emerging Markets          1115.53         0.48       29.37
 MSCI LatAm                     2829.49        -0.78       20.88
 Brazil Bovespa                74800.33        -1.55       24.20
 Mexico IPC                    48855.27        -0.72        7.04
 Chile IPSA                     5608.67         1.67       35.10
 Chile IGPA                    28099.38          1.6       35.52
 Argentina MerVal              27428.71        -0.18       62.13
 Colombia IGBC                 10691.96        -0.64        5.57
 Venezuela IBC                   682.72         -3.7      -97.85
 Currencies                                  daily %       YTD %
                                              change      change
 Brazil real                     3.2888        -0.23       -1.20
 Mexico peso                    19.2430        -0.64        7.80
 Chile peso                       638.7        -0.77        5.01
 Colombia peso                     3022        -0.40       -0.68
 Peru sol                         3.249        -0.09        5.08
 Argentina peso                 17.6900        -0.37      -10.26
 Argentina peso (parallel)         18.1         0.11       -7.07
 (Reporting by Bruno Federowski and Anthony Esposito; Editing by
Meredith Mazzilli)
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